As 2025 draws to a close, it’s clear this has been a year of both opportunity and complexity. At Linkenheimer LLP, we’ve seen clients across all industries navigate evolving tax rules, shifting market conditions, and tighter reporting demands. These changes underscore one truth we’ve always believed: proactive financial management — not reactive compliance — is what drives lasting success.

This year, the conversation wasn’t just about filing returns or meeting reporting deadlines. It was about maintaining high-quality financial data, understanding where your business stands in real time, and planning strategically amid uncertainty.

Key Trends We Saw in 2025

  1. Growing Focus on Data Integrity and Financial Readiness

Clean, accurate, and timely financial information proved to be a differentiator this year. With credit conditions tightening and lenders requesting more granular reporting, companies with well-organized accounting systems and reconciled statements had a clear advantage.

  • Financial institutions increasingly required interim financials and management-prepared statements to support credit renewals.
  • Auditors and stakeholders placed greater emphasis on documentation quality, accounting estimates, and revenue recognition policies under GAAP.
  • Businesses that invested in cloud-based accounting systems, automation, and standardized chart of accounts found it easier to analyze performance and make informed decisions.

In short: clean data equals clear strategy. If your financial statements are delayed, inconsistent, or manually prepared, 2026 is the year to modernize.

  1. Heightened IRS Scrutiny and Compliance Enforcement

The IRS continued ramping up enforcement efforts, particularly targeting high-income individuals, partnerships, and pass-through entities. Enhanced funding led to a surge in correspondence audits and inquiries into Employee Retention Credit (ERC) claims, basis tracking, and related-party transactions.

Proper documentation and contemporaneous support remain critical. For 2026, expect continued attention high risk areas.

  1. Significant Tax Law Changes

With major tax provisions as a result the One Big Beautiful Bill Act (“OBBBA”), this year became a turning point for forward-looking tax planning. Some major changes include:

  • 20% Qualified Business Income (QBI) deduction for pass-through entities made permanent
  • An increase in estate tax exemptions (from $13.9M in 2025 to $15M in 2026, adjusted for inflation)
  • Changes to bonus depreciation, which is back up to 100% in 2025 for assets placed in service after January 19th, 2025
  • Changes to deductibility of employer provided meals
  • Deductibility of Research and Development costs for qualified activities

These tax shifts make 2025 year-end planning especially valuable. What you do before December 31st can materially impact both current and future tax liabilities.

What to Take Into 2026

  1. Treat Financial Information as a Strategic Asset

Clean, reconciled books aren’t just about compliance — they’re about clarity.

  • Reconcile balance sheet accounts monthly, not just annually.
  • Maintain organized supporting documentation for related party transactions, major transactions and accounting estimates.
  • Regularly update fixed asset schedules, debt amortizations, and accruals to ensure accuracy.
  • Document internal controls and standard operating processes — this builds trust with investors, lenders, and regulators.

By entering 2026 with well-prepared financials, you’ll reduce stress during tax season, accelerate decision-making, and strengthen your negotiating position with financial partners.

  1. Elevate Tax Planning from Tactical to Strategic

Year-end tax planning is more than checking boxes, it’s about anticipating changes and strategically aligning tax outcomes with business goals. Consider the following:

  • Timing income and deductions — Accelerate or defer depending on projected rate changes in 2026.
  • Review entity structure — C corporations, partnerships, and S corps may be impacted differently by expiring TCJA provisions.
  • Evaluate capital expenditures — Take advantage of bonus depreciation or Section 179 expensing.
  • Maximize retirement contributions and deferral strategies — particularly for owners in high-income brackets.
  • Estate and gift planning — Have you looked at your estate? Consider lifetime gifting or trust funding before exemption levels are reduced.

Engaging early allows for modeling scenarios and avoiding last-minute surprises.

  1. Strengthen Forecasting and Cash Flow Visibility

Rising costs and uncertain markets make forward-looking financial analysis essential.

  • Implement rolling forecasts to project income, liquidity, and tax liabilities quarterly.
  • Integrate your financial statements with tax projections for a holistic picture of cash flow needs.
  • For businesses, stress-test assumptions around revenue recognition, customer concentration, and expense trends.

Proactive forecasting helps you identify issues before they affect profitability or compliance.

Before Year-End: Actions to Take Now

  1. Reconcile all major balance sheet accounts and review key estimates for accuracy. End the year confident that your books are accurate.
  2. Finalize depreciation elections and bonus depreciation timing while current rules remain favorable.
  3. Analyze tax projections for acceleration or deferral opportunities.
  4. Confirm capitalization policies and book-tax differences for consistency between book and tax.
  5. Meet with your Linkenheimer advisor to model 2025 tax law impacts and discuss strategies for optimizing tax savings amid changes.

Join Us: Preparing for 2026 and Beyond

To help clients navigate this critical transition period, we’re pleased to announce our upcoming event where we will review:

The biggest lessons we learned in 2025 so that 2026 happens on your terms, without surprises!

📅 November 6th, 2025
📍 Hosted by North Bay Trusted Business Advice (NBTBA), a partner affiliation supported by Linkenheimer LLP
🎙️ Featuring Linkenheimer speakers and specialists

This session gives you forward visibility and more control of your business as we head into the new year.

We’ll explore:

  • Practical tax planning strategies
  • How to maintain financial statement integrity through year-end
  • Forecasting tools and best practices for small and mid-sized businesses
  • Cover other topics such as cash, banking, insurance, HR, and Key Performance Indicators to use.
  • Live Q&A with Linkenheimer + Other local advisors

Space is limited — register here: https://nbtba.org/events/#November2025

At Linkenheimer LLP, our goal remains the same: helping you make informed, strategic decisions with confidence. As we move into 2026, the businesses and individuals who act early with clean financial data, sound planning, and strong financial controls will be the ones best positioned to thrive.